Discover Card Balance Transfer Offers Might Be a Bad Idea

Although I personally haven’t used a balance transfer offer in at least a couple years, since I run CreditCardForum obviously I am constantly staying on top of who’s giving what.

As a Discover cardholder, they periodically solicit me with balance transfer promotions (as do most credit card companies). Here is an example of an email they sent me: (Please note that the offer noted below is no longer available and this example is for information purposes only)

Discover balance transfer email solicitation

Out of curiosity, I clicked on the link to find out what the offer was. It redirected me to the website where I had to login to view the promotion. This is what it ended up being (I’m copy/pasting here):

  • APR for Qualifying Balance Transfers – 0.0% APR for 12 months after the first Balance Transfer posts to your Account under this offer, then your purchase APR will apply, currently 11.99%. The purchase APR will vary with the market based on the Prime Rate.
  • Balance Transfer Fee – 3.0% with a minimum of $10.00 and no maximum for each balance transfer made by the reply by date for this offer.

*Note: 11.99% is the standard APR on my account, yours may differ.

Why is that a bad idea?

Is getting 10 months interest free bad? No, but it’s not spectacular either… I would say it’s just an average offer.

If you apply for a new card instead, you will probably be able to get a Discover balance transfer offer that is up to 50% longer (18 months). You can see their current offers on this page.

Going with 18 vs. 10 months is a big difference, because remember you have to pay that balance transfer fee every time you use one of these offers. So if you took the offer which was in that email, you would not only be paying 3% now, but you would also have to pay a BT fee to do another transfer in 10 months (if your debt isn’t paid off before then).

Apply for a different Discover card?

As is the case with EVERY bank, you cannot transfer balances among their cards. So that means you cannot transfer your balance from one Discover card to another.

However I’m assuming you’re looking to transfer your balance from elsewhere. If that’s the case, you might want to consider applying for another card from Discover (one that you don’t have).

For example if you currently have the More (which was discontinued in 2013) then alternate options would be applying for Discover it® Cashback Match™ “their new “it” card and whatever 0% promotion they’re currently offering with it.

The lesson?

Not to beat up on the Discover card balance transfer offers, because this hold true for all issuers: as a rule of thumb, generally you won’t get the longest 0% offers from your existing card. Instead, you almost always need to apply for a new card in order to get the best deal.

The reason banks do it this way is quite obvious – if you already have a card, then you’re a captive audience. But in order to convince you to get a new card, they know they have to go that extra mile and be uber generous with their signup incentive.

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